Why doctors need to be financially independent

Most people would want to become financially independent, but some of us want to be financially independent (FI) much earlier in life. There are plenty of reasons (including some very obvious ones) why anyone would want FI, but I’ve seen one consistent theme over the years regarding FI:

Work is more enjoyable if money is not a factor. 

I’ve wavered on this conclusion for years, and no matter how much I try to dismiss this notion, it keeps recurring. I see the most blatant of this in the doctors in my clinic. Many doctors gripe about having to see more patients. Often the finances dictate that in order to remain net neutral, a physician needs to see one more patient. Sometimes, it’s one more patient per day. Other times, it’s one more patient every other day. Is seeing one additional patient per day or week too onerous? Perhaps, but the interestingly, the doctors that fight the most about seeing one more patient often spend their weekends or vacations volunteering at free clinics!

How ironic is that?


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How can one logically refuse to see one more patient in a day of clinic yet be willing to spend an entire day doing the same thing pro bono?

Humans are illogical. I know doctors who come from significant levels of inherited wealth (read: several generations-worth of extreme wealth) who work at academic institutions at salaries in the tenth percentile of the expected norm. Frankly, I’ve never asked them why they do this, but my impression is that this particular type of job is absolutely rewarding for reasons other than financially. Kudos to them that they didn’t have to rack up over $148,000 in medical school debt.

With FI, you can always walk away 

Sometimes patient care is stressful. Sometimes the administrative aspects of medicine are stressful. Administration and insurance companies are the two aspects of medicine that I hate the most. Sometimes these are the factors that cause doctors to quit or retire.

If you are not working for the money, you can walk away from a bad practice situation without worrying about feeding your family. You could find other career options elsewhere without having to clamp down your finances. Hell, even if you don’t leave a bad practice situation, FI might allow you not to care so much about the small stuff.

Life is just better if your livelihood doesn’t depend on your day job. Period.


Why would a doctor even want to retire early?  

The general population of doctors really do balk at the notion of early retirement. Why? We leave a relatively high income on the table by not working. A significant amount of our life is spent training to achieve our unique skill set. It would be a waste to curtail a potentially 25-30 year working career to do something else, especially if you had taken up a valuable medical school and residency spot from someone else who would have otherwise worked for thirty years.

The truth is that the goal of financial independence is not to quit early—it’s to allow yourself the option of not having to your job dictate your life. The premise of FI is that you can choose to do whatever the hell you wanted and still have enough to feed your family, take reasonable vacations and trips, and stay healthy and happy. It doesn’t mean that you take excessive luxury vacations every month.

For a doctor, this means that you can spend more time taking care of your patients, taking care of your family, and taking care of yourself. Most doctors I know actually like what they do.

What are you doing to get closer to FI?


Photo courtesy of Flickr.

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8 thoughts on “Why doctors need to be financially independent

  1. Agreed. Wife and I are both physicians who invested in properties and FI. With 170 tenants paying us rent monthly we can afford to retire but work because we want to.

    1. Wow. What stage in your career are you guys in, and how did you start delving into real estate? I have considered diving in, but have been hesitant about making the right decision!

      1. 16 years ago we lost 1 million in tech crash in 2000, also lost $600K in 2008 from corrupt hedge fund manager. We decided to take matters in our own hands. Now we have 2 apt buildings, 1 shopping plaza, 1 retail rented to McDonalds, 1 x 81 bed student resident rented to a University on a net lease, 2 mixed retail and commercial units, and our own medical clinic. Real estate has always been a good builder of wealth. Money is constantly being devalued. Gov’t have no intention of paying off debts. With real estate you are long hard assets – bricks and mortar and short money – mortgages and with tenants paying for your hedge position. Just don’t over leverage. Good Luck!!!

        1. Impressive that you moved into commercial spaces, especially renting out to fast food (=$$$). Having a stable tenant population like students allows a good stream of income. Does the university have its own maintenance staff, or do you have to contract out property management for these units?

          1. We maintain the interior and exterior but they pay for all repairs above normal wear and tear for the interior and we tack on a 15% management fee on top of the cost of repairs. I have building manager for that property. 2 apts have live in superintendents. The plaza is also managed by another property manager.

            A good super can make or break an apt. as they help pick and screen tenants. I have had a hanging in one apt, half a car went through one store in an accident, hired a crooked super who was a fraud artist, a fire and also a major flood when a sprinkler pipe broke. Even with all these headaches it is definitely worth it. Borrow money and have someone else pay it off. Good Luck!

          2. Are these properties in the same city as where you reside? Do you think that you and your wife would have been able to invest in these types of real estate if both of you weren’t relatively high-income physicians? As the motto goes, it takes money to make money!

          3. 4 in the same city, 4 in surrounding cities within 1/2 to 1 1/2 hour drive. Everyone can achieve success on their own terms. MD’s have a stable source of income and can use earning power to borrow money to invest not spend. Someone once told me medicine is a cash cow but turn the milk into butter. Diversify your income away from medicine. Do not put too much in the stock market where you do not have the power of leverage and you are at the bottom of the food chain. Capital gains can turn into capital losses. Go for passive income. Remember as a landlord you are the lord of the land. Good Luck!!! https://uploads.disquscdn.com/images/760ea9eb58ef7aba6ed16b4386f2570ce05e1a6daef8944941ef65648f5d3602.png https://uploads.disquscdn.com/images/74e758beed5b85a273088cd6740ed0578b98c263cb4c465963e47eec54461bd6.jpg https://uploads.disquscdn.com/images/500b7825bbb3f3c20d5a1f8452cdd230f3d820a9029ad0383184fea14b6f982c.jpg https://uploads.disquscdn.com/images/2835804165059048dda79789e9cd44ceed67171180da76072cd9284f8f4d3afa.png https://uploads.disquscdn.com/images/a9cd36c08d3cbe19071c3a26477b99e29ac820b26e9edf50966252643ea13c36.jpg https://uploads.disquscdn.com/images/b72a1774b7bc765562222521acd47632fe23340d3b69401000a2f1f6e2ff468f.jpg https://uploads.disquscdn.com/images/e2260533230ad40c148b8d4efcf342165cb0ee9300b00e821c5ae9ef6f46e5e4.jpg

          4. Are each of these properties under a separate company, and have you experienced that banks require much of a personal guarantee when taking out loans to acquire these properties? My biggest fear is the risk of making poor choices for real estate and have those losses tie up your income stream from being a physician.

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